UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Pham Trong Kha THE EFFECT OF TRANSFORMATIONAL LEADERSHIP FACTORS ON ORGANIZATIONAL COMMITMENT, JOB SATISFACTION AND TRUST IN VIETNAMESE STATE-OWNED ORGANIZATIONS MASTER OF BUSINESS (Honours) Ho Chi Minh City – Year 2014 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Pham Trong Kha THE EFFECT OF TRANSFORMATIONAL LEADERSHIP FACTORS ON ORGANIZATIONAL COMMITMENT, JOB SATISFACTION AND TRUST IN VIETNAMESE STATE-OWNED ORGANIZATIONS ID: 22120051 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr. Pham Quoc Hung TIEU LUAN MOI download : skknchat@gmail.com Ho Chi Minh City - Year 2014 TIEU LUAN MOI download : skknchat@gmail.com TABLE OF CONTENTS ACKNOWLEDGEMENT ABSTRACT CHAPTER 1: INTRODUCTION .3 Significance of research .4 Research methodology and research scope. 5 CHAPTER 2: LITERATURE REVIEW .2 Relationship between transformational leadership factors and job satisfaction …8 2.3 Relationship between transformational leadership factors and trust .4 Relationship between transformational leadership and organizational commitment…………………………………………………………………………………12 2.5 Relationship between idealized influence, empowerment and organizational Commitment.6 The conceptual model and hypotheses of the research. 17 CHAPTER 3: RESEARCH METHODOLOGY .2 Data collection and procedure .4 Data analysis method.
25 CHAPTER 4: DATA ANALYSIS AND RESULTS. 27 TIEU LUAN MOI download : skknchat@gmail.3 Exploratory Factor Analysis (EFA).1 Multiple Regression Analysis to define the effect of idealized influence, inspirational motivation, intellectual stimulation, individualized consideration on job satisfaction.2 Multiple Regression Analysis to define the effect of inspirational motivation, intellectual stimulation, individualized consideration on Trust .3 Multiple Regression Analysis to define the effect of inspirational motivation, intellectual stimulation, individualized consideration on Commitment………….4 Simple Regression Analysis to define the effect of idealized influence on empowerment. Simple Regression Analysis to define the effect of empowerment on commitment……………………………………………………………………….47 CHAPTER 5: CONCLUSION, IMPLICATIONS AND LIMITATIONS .1 Conclusion and discussion .3 Limitations and future research direction. 65 Appendix A: Guidelines for In-depth Interview Appendix B: Questionnaire (English Version) Appendix C: Questionnaire (Vietnamese Version) Appendix D: Histogram, Normal Regression & Scatter plot of Dependent TIEU LUAN MOI download : skknchat@gmail.com LIST OF FIGURES Figure 2.1: A theoretical model Figure 3.1: Research Process Figure D-JS1: Histogram of Job Satisfaction Figure D-JS2: Normal Plot of Job Satisfaction Figure D-JS3: Scatter Plot of Job Satisfaction Figure D-TR1: Histogram of Trust Figure D-TR2: Normal Plot of Trust Figure D-TR3: Scatter Plot of Trust Figure D-CO1: Histogram of Organizational Commitment Figure D-CO2: Normal Plot of Organizational Commitment Figure D-CO3: Scatter Plot of Organizational Commitment Figure D-EM1: Histogram of Empowerment Figure D-EM2: Normal Plot of Empowerment Figure D-EM2: Scatter Plot of Empowerment TIEU LUAN MOI download : skknchat@gmail.com LIST OF TABLES Table 3.1 Source of measurement scale Table 4.2 Reliability test result Table 4.3 KMO and Bartlett's Test Table 4.4 Rotated Component Matrix Table 4.5 Total Variance Explained Table 4.6 Correlations matrix of Job Satisfaction, Idealized influence, Inspirational motivation, Intellectual stimulation and Individual consideration Table 4.7 Model Summary of multiple regression analysis Table 4.8 ANOVA of multiple regression analysis Table 4.9 Coefficients of multiple regression analysis Table 4.10 Correlations matrix of Trust, Inspirational motivation, Intellectual stimulation and Individual consideration Table 4.11 Model Summary of multiple regression analysis Table 4.12 ANOVA of multiple regression analysis Table 4.13 Coefficients of multiple regression analysis Table 4.14 Correlations matrix of Commitment, Inspirational motivation, Intellectual stimulation and Individual consideration Table 4.15 Model Summary of multiple regression analysis TIEU LUAN MOI download : skknchat@gmail.16 ANOVA of multiple regression analysis Table 4.17 Coefficients of multiple regression analysis Table 4.18 Model Summary of simple regression analysis Table 4.19 ANOVA of simple regression analysis Table 4.20 Coefficients of simple regression analysis Table 4.21 Model Summary of simple regression analysis Table 4.22 ANOVA of simple regression analysis Table 4.23 Coefficients of simple regression analysis Table 4.24 Summary of hypotheses testing result TIEU LUAN MOI download : skknchat@gmail.com TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT According to many previous studies, the effective leaders are one of the most important factors creating influences on the performance in the Vietnamese state- owned organizations;.
The purpose of this study was to investigate the relationship between transformational leadership factors and job satsifactions, trust and organizational commitment in Vietnamese state-owned organizations. There are 208 qualified respondents including 123 men (occupied 59 percent) and 85 women (occupied 41 percent), aged from 22 to over 40 years old. All of respondents have over 2-year working experiences and there are about 23% of respondents who are keeping at least Deputy Manager positions. The findings of the study indicated that transformational leadership factors including indealized influence, inspirational motivation, intellectual stimulation and individualized consideration have significant and positive correlations with job satisfaction, trust and organizational commitment.
The research results have contributed to the literature and provided more evidences for the managers in their decisions of their workforce. However, the sample for the research is still limited due to the application of convenient sampling method and surveyed only in Ho Chi Minh City and Vung Tau city. Keywords: transformational leadership, indealized influence, inspirational motivation, intellectual stimulation and Individualized consideration, job satisfaction, trust and organizational commitment TIEU LUAN MOI download : skknchat@gmail.com -1- CHAPTER 1: INTRODUCTION 1.1 Research background The effective leadership is considered one of the most concerning challenges in the organizations and becomes a common topic for many discussions in recent years. Effective leaders could be understood as the ones who have the ability to create influence and know how to involve others, enabling them to act within the correct vision, mission and goals so that the organization heads in the right direction and uses the correct methods to get there (Einstein & Humphreys, 2001).
In the private sector, the leadership style has been changed and updated to be more effective in operations but the Vietnamese state-owned organizations are still led in the old leadership style, which could be a big concern for Vietnam’s development in the future. According to Gates (2000), in the Vietnamese state- owned organizations, the environment is evaluated to be lacked most of the elements essential to a market-oriented economy. In general, it’s evaluated as an environment still lacks of the activeness and changes to improve the organization performance in the fast development of the Vietnam market during two recent decades. The full range of leadership theory developed by Avolio and Bass (1994) forms a continuum, which describes the laissez-faire style of leadership at one end, then toward the middle of the continuum appears the transactional style of leadership, and finally moving to the opposite side of the continuum, the transformational style of leadership resides.
The laissez-fare style of leadership TIEU LUAN MOI download : skknchat@gmail.com -2- describes a hands-off approach to leadership. Transactional leadership deals with an exchange or transaction between the leader and follower, usually the leader outlines responsibilities and attaches rewards to the follower's compliance and fulfillment of obligations. In the meantime, the transformational style is different from transactional style because the leader engages the follower by looking for creative solutions to problems and treats each follower as an individual who deserves mentoring and coaching (Bass, 1997). In respect of considering which style is best suited to motivate followers to achieve a higher level of performance, increase their job satisfaction and increase their commitment to the organization? Homrig (2002) stated that transformational model of leadership is best suited for today's and tomorrow's strategic environment".
Waldman et al. (1990) stated that when a transformational leader finds him or herself in a non win-win situation, he or she will try to convert this situation to a win-win problem-solving situation. Thus, transformational leadership is one of critical solutions for the effective organizations. There are many previous researches which have studied the positive relationship between transformational leadership behaviors and job satisfaction, trust and organizational commitment in the workplace.
However, the number of studies conducted in Vietnam and specifically in Vietnamese state-owned organizations about this topic is very limited. Therefore, this research will focus on investigating the link between transformational leadership factors and some workplace determinants including job satisfaction, trust and organizational commitment in the Vietnamese state-owned organizations. TIEU LUAN MOI download : skknchat@gmail.com -3- In summary, the final goal of this research is to examine the relationships among transformational leadership, organizational commitment, job satisfaction and trust, which could eventually help managers, leaders and workers in the Vietnamese state-owned organizations understand this relationship and convert this into higher performance for the organization.2 Research objectives The purpose of this study was to examine the relationship between transformational leadership factors, job satisfaction, organizational commitment and trust in the Vietnamese state-owned organizations. Particularly, the research will investigate: - The relationship between factors of transformational leadership on job satisfaction - The relationship between factors of transformational leadership on trust - The relationship between factors of transformational leadership on organizational commitment - The mediating role of the empowerment to the relationship between the idealized influence and the organizational commitment.3 Significance of the research This study contributes to leadership theory and practice in its examination of influences of transformational leadership factors on the employee’s attitudes job satisfaction, organizational commitment and the trust in the Vietnamese state-owned TIEU LUAN MOI download : skknchat@gmail.
The research also enhances the amount of information available to leaders and allows leaders to respond to their followers' needs.4 Research methodology and research scope: This study uses questionnaire to collect data. The survey questionnaire is originally developed in English and then translated into Vietnamese. In-depth interviews are then conducted with 10 people in order to modify the Vietnamese version of the questionnaire before the survey is implemented in mass. The next step is analyzing the collected data.
The data of this research is processed using SPSS software with three main stages. First, Cronbach’s Alpha is used to test the reliability of the measurement scale. Then, the validity of the measurement scale will be checked by Exploratory Factor Analysis (EFA). Finally, simple regression and multiple regression are employed as the main method for investigating the relationships among factors in the research model.
Respondents, who have been chosen to conduct the survey for this study, are working for the state-owned organizations in Ho Chi Minh City and Vung Tau City.5 Research structure This study is organized into five chapters. It starts with the introduction chapter which presents an outline of this research. This chapter includes background of the research, motivation for doing research, and research objectives. Besides, this chapter also has a brief definition of key terms as well as scope of the research and methodology of data analysis is also mentioned.
Chapter two reviews and synthesizes TIEU LUAN MOI download : skknchat@gmail.com -5- the theories in the literature of 8 concepts, including 4 factors of transformational leadership (idealized influence, inspirational motivation, individualized consideration, and intellectual stimulation), empowerment, commitment, trust and job satisfaction. This chapter also describes research model and proposed hypotheses. Chapter three introduces research methodology used to empirically test the research model. Chapter four presents the results of data analysis.
The final chapter discusses summarily the study’s core findings, suggests some recommendations for business strategy of international luxury companies based on findings and finally points out some limitations of the research. TIEU LUAN MOI download : skknchat@gmail.com -6- CHAPTER 2: LITERATURE REVIEW This chapter mainly introduces the theories, which are proposed by many scholars in academic field, relate to each of factors in the model, research model of the study, and propose the hypotheses for the research.1 Transformational Leadership The Multifactor Leadership Questionnaire (MLQ) developed by Avolio and Bass (1995) provides an instrument to measure degrees of the existence oflaissez- faire, transactional and transformational styles of leadership as perceived by followers. Transformational leadership has four important features: Idealized influence, Inspirational Motivation, individualized consideration and intellectual stimulation (Avolio et al., 1999; Bass & Avolio, 1993, 1994; Ismail et al., 2010; Pillai et al., 1999) The concept of transformation was first time introduced by Burns (1978) focusing on morals and ethics (Bass, 1985a, 1985b; Burns, 1978). In the mid- 1980, the paradigm of leadership shifted from transactional and charismatic leadership to transformational leadership, since Bass refined theory of Burns (1978).